FedEx agrees to $228 million settlement in driver classification case

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Updated Jun 21, 2015

FedEx_GroundFedEx Ground announced last week it has reached an agreement to pay $228 million to settle a lawsuit brought by truck operators claiming the company has misclassified them as independent contractors, and not company employees, thereby denying them certain state-required benefits.

The case was pending in a U.S. District Court in Northern California, and the settlement still must be approved by a court to be finalized.

The case is related to two cases ruled on last year, in which both the 9th Circuit Court of Appeals and the Kansas Supreme Court ruled against FedEx and in favor of the truck driver plaintiffs.

The 9th Circuit’s August 2014 ruling said that 2,300 FedEx Ground drivers between 2000 and 2007 were denied company-owed benefits due to their alleged improper classification. The Kansas Supreme Court ruled the same in October 2014 for a group of 500 other drivers.

It’s unclear whether FedEx’s $228 million settlement will cover those cases, and more information will be sought this week.

FedEx last year vowed to appeal both of those decisions.